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PRESIDENT Arroyo on Monday justified current policies of
her administration to manage whatever surprises may
arise from whatever direction the global and national
economy takes.
She
cited the adequacy of her policies and strategies in
thumbing down calls to review her major economic
policies, as record inflation levels, seen to rise even
more as oil prices continue to climb, cut deeply into
people’s pocketbooks.
She
vowed to “stick” to what she described as “proven,
hard-won measures” that have created a revenue stream
for social programs and satisfied international
credit-rating agencies during her speech to Philippine
envoys assigned in North America.
“For
whatever challenge a wayward world economy may throw us,
and because we have been prepared for it, we have been
able to shield our nation from the worst effects of
[the] food and fuel crises worldwide. Had we acted
differently or not acted at all, all would be lost
today,” she told the diplomats assembled at the Palace
Rizal Hall.
“We
remain committed to the path we have taken. The best
solution is the one that has worked. We remain on track
and firmly focused on getting the country well on the
road by 2010 to First-World [status] in 20 years. We are
sticking to it and we are widening the fiscal reforms
that have earned us the respect of international
finance, bringing our interest rates down and making our
peso stronger,” she said.
As if
addressing the clamor of some lawmakers to freeze or
modify the value-added tax (VAT) on oil, the President
said the government will “plant” its fiscal reforms
“deeper in the structures of government, in the economy;
all this is for the benefit not only of our people
tomorrow, but the next President, as well.”
Without
mentioning the VAT, the President said “these hard
decisions were intended to raise large amounts of new
revenues” now being spent on additional funds for health
and education, among others.
This was
supported by Sen. Richard Gordon, albeit in another
venue and without knowing about the statements of the
President, where he said advocates pushing the
government to scrap the E-VAT amid rising fuel and food
prices to rethink their position.
“We have
to think about this more deeply and let us go forward
cautiously because should we remove the value- added
tax, we also forgo the windfall income from it,” he
said.
“The
point I want to raise here is that Malacañang should
already be preparing the prioritization of
disaster-related public programs and projects to be
funded from the E-VAT collection,” added Gordon, who is
also chief of the Philippine National Red Cross.
He noted
the National Disaster Coordinating Council had reported
that expenses related to disasters caused by recent
typhoons already added up to P13 billion. “In a span of
one year, we have about 20 to 22 disasters, and the
average cost of dealing with these is estimated at P15
billion, which means almost 90 percent of the money
intended to be spent for handling disasters for a year
is nearly exhausted…in other words, that [VAT windfall]
is where we will get the money we need, if needed.”
The
President noted the international finance community
“agrees” the Philippines is “making important progress,”
as shown by the decision of international credit-rating
agencies like Moody’s Investor Service, Standard &
Poor’s, and Fitch Ratings to keep a positive or stable
outlook on the country.
Philippine competitiveness, she noted, had a “remarkable
improvement,” as shown in the latest World
Competitiveness Yearbook, having gone up by five
notches.
The
President said the “fiscal wherewithals bestowed by our
reforms” have allowed the government to focus on its
day-to-day problems related to the world food and fuel
crises, while making the appropriate investments in the
country’s future.
She also
said government-subsidized rice prices selling at P18.25
and P25 per kilo are lower or about the same as
subsidized rice prices in countries like Indonesia
(P25.30) and Malaysia (P27), and that commercial rice in
the Philippines is cheaper than those sold in
rice-exporting countries like Thailand (P56) and Vietnam
(P67).
“So,
when we have commercial rice at P35, that’s a blessing.
Our subsidized rice is P18.25 and P25 per kilo.
Indonesia subsidizes rice at P25.30 and Malaysia, P27.
Either we are all handling the crisis well or equally
bad,” she said.
Back to
Gordon, he urged the Palace to “show where it will be
using” the VAT windfall revenues so that a good decision
could immediately be made on whether to enter the funds
into savings or the national budget.
That
way, the funds “could and should be used to create jobs
for our people,” as the government carries out
relief-and-rehabilitation efforts.
“Basically, that’s where I think we should be focusing
our attention right now. Again, I must reiterate that
the focus should not be on E-VAT debates that can be
handled in the Senate when the sessions open,” he said.
“The focus today must be on the fact that we need to
rise as a nation, to get together and help the many
millions of our people who are suffering right now and
who need the infrastructure to get back their lives and
their jobs… not subsidies and patronage.” (With Butch
Fernandez) |
